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Know Your Rights - Telemarketers

(James Limbach @ ConsumerAffairs) When you get one of those phone calls we all hate to get: a telemarketer from a company you don't know trying to sell you something. Is it legit? Who knows.

That's a pretty common occurrence. According to a new survey from Consumer Federation of America (CFA), nearly nine in 10 adults in the United States are concerned that these kinds of calls might be scams. And, more than three-quarters think that it’s hard for most consumers to tell if a sales call is on the level.

Additionally, the survey revealed that most adults don’t know their basic telemarketing rights. “Knowing your rights can help you tell the difference between legitimate telemarketing offers and scams,” says Susan Grant, Director of Consumer Protection at CFA and leader of CFA’s Consumer Protection Institute.

As part of National Consumer Protection Week, CFA is offering new resources to help consumers avoid telemarketing fraud. They include a guide about consumers’ basic telemarketing rights, tips on spotting fraud and a short, humorous video. This educational project was supported by a grant from Western Union.

"A person’s best defense is to learn how to spot the signs of a scam before sending money,” said Shelley Bernhardt, director of global consumer protection at Western Union. “Consumer fraud is an industry issue. By working with CFA we can help prevent unsuspecting individuals from becoming a victim of fraud.”

National Do Not Call Registry

The first question in the survey was whether the respondents had put their phone number on the National Do Not Call Registry (DNC). Of the 1,008 adults surveyed, more than half (52%) said they had put their number on the DNC, 46% had not, and 2% were unsure. A greater number of older people said they had done so than younger people (68% of respondents age 55 and older versus 30% age 18-34).

But in a series of multiple choice questions about consumers’ telemarketing rights, the people who had put their numbers on the DNC or who said they were concerned about telemarketing fraud did not necessarily fare any better than other survey respondents in choosing the correct answers. For instance, the second question asked, if you put your phone number on the DNC, which of the following is true:

No telemarketers are allowed to call you.

Telemarketers are allowed to call you if you have recently done business with them. (correct)

Any telemarketer is allowed to call you, but only in the late afternoon between 4 and 6 p.m.

Only 34% of the people surveyed answered this correctly overall, and of those who had put their number on the DNC, only a slightly higher number -- 39% -- got it right. More than half of the respondents (55%) thought that no telemarketers were allowed to call them if their numbers were on the DNC; the percentage was the same for those who had put their numbers on the DNC. Of those who said they were very or somewhat concerned about telemarketing calls being scams, the results were more mixed: 30% of those very concerned about telemarketing fraud chose the right answer, while 46% of those who said they were somewhat concerned did. Eight percent of respondents overall thought that putting your number on the DNC limits the time that telemarketers can call to late afternoon. The results were similar for those who were very concerned about telemarketing fraud (9% chose that answer) and somewhat concerned (8%) and a bit better for those that had put their numbers on the DNC (only 4% choose that answer).

“Simple things such as understanding when companies are violating your Do Not Call rights and when they’re not can help consumers detect possible fraud, because legitimate companies usually follow the rules, scammers don’t,” said Grant. “Consumers who put their numbers on the Do Not Call Registry should be very wary of sales calls from unfamiliar companies, because those companies shouldn’t be calling.”

Significant survey findings

Fifty-eight percent of consumers knew that if you don’t put your phone number on the DNC, telemarketers must stop calling you if you tell them over the phone not to call again – others incorrectly thought that they could ignore your request (21%) or it had to be in writing (17%). The CFA guide explains that consumers always have the right to tell telemarketers not to call again, no matter whether their numbers are on the DNC and regardless of whether they have recently done business with those companies or had given them written permission to make sales calls to them.

Consumers were more knowledgeable about their rights when prizes are offered as part of a sales promotion, with 63% correctly answering that you cannot be required to buy something to be eligible to win. Only 11% mistakenly thought that you could be required to make a purchase as long as the cost was less than half the value of the prize, but disturbingly, 19% incorrectly believed that buying something will improve your chances of winning.

On a question about robocalls that use recorded messages rather than live people speaking, only 25% of respondents answered correctly that robocalls for sales purposes may only be made to your home phone or cell phone if you gave the telemarketer written permission to make such calls to you. Twenty-nine percent incorrectly thought that telemarketers could make these calls to your home phone but not your cell phone, and 36% mistakenly believed that telemarketers could make those calls to you without your written permission if you had bought something from them before.

Thirty-six percent of respondents knew that when a telemarketer calls on behalf of another company, it is allowed to show that company’s number on consumers’ Caller ID instead of its own. Thirty-five percent incorrectly thought that a telemarketer is only required to show its number on Caller ID if the consumer’s number is on the DNC, and 16% mistakenly believed that a telemarketer calling on behalf of a charity is not required to show Caller ID information.

When asked about a telemarketer that calls offering to fix problems with your credit record, 35% of respondents correctly answered that the company is not allowed to ask for any payment until it has actually fixed the problems. Nearly as many, however (34%), mistakenly believed that that the company could charge the whole fee upfront as long as it had to give you a full refund if it failed to fix the problems and 16% incorrectly thought that the company could charge 10% of the fee in advance and the remainder after providing the service.

When asked if they were concerned that telemarketing calls from companies they haven’t done business with might be a scam instead of a legitimate offer, 89% of respondents said they were (67% were very concerned, 22% somewhat concerned). And when asked how easy or difficult they thought it was for most consumers to tell if telemarketing call is legitimate or a scam, 76% said that they thought it was difficult (42% said very difficult, 34% said fairly difficult).

How they see it

Some of the demographic information gleaned by the survey was also interesting. Far more white respondents had put their numbers on the DNC (61%) than black (33%) or Hispanic (24%). Fewer adults at the low end of the income scale (less than $25,000) had put their numbers on the DNC (36%) than at the higher end of the scale (68% of those with incomes from $75,000 up to $99,999, and 60% of those with incomes of $100,00 or more had done so).

The differences between age, race and income were generally less sharp, however, when it came to answering the telemarketing rights questions correctly. One notable difference was in the question about prize offers, where a greater number of older people answered correctly than younger (75% of those age 55 to 64 and 71% age 65 and older compared to 50% of respondents age 18-34).

On the level of concern about whether telemarketing calls from unfamiliar companies might be scams, there were no significant differences between age, racial or income groups. Younger people and Hispanics were a bit more confident that most consumers can easily tell if a telemarketing call is legitimate or a scam (31% of those age 18-34 thought it was easy for most consumers to tell, and 38% of Hispanics, compared to 23 % of survey respondents overall). Only 15% of those in the $100,000+ income level thought that it would be easy for most consumers to tell.

“We want consumers to ask themselves, ‘Should this company be calling me? Why am I getting a recorded sales pitch when I never gave this company written permission to make them to me? Why doesn’t the company’s phone number show on my Caller ID?’ And to hang up if they think that something is wrong,” said Grant. “There are other clues to look for as well, such as whether telemarketers are asking for payment upfront for to help you settle your debts and whether they only accept payment using a money transfer service or a prepaid card product.”